<PAGE>

                                                                    EXHIBIT 4.6

                           [BRYANT PARK CAPITAL LOGO]

CONFIDENTIAL

                                                                   March 1, 2004

Xenonics, Inc.
2236 Rutherford Road
Carlsbad, CA 92008

Ladies and Gentlemen:

This letter agreement confirms that Xenonics, Inc. (together with its
subsidiaries and affiliates "the Company") has engaged Bryant Park Capital, Inc.
("BPC") to act as its exclusive financial advisor and consultant with regard to
possible capital raising transactions. The engagement shall be considered
effective as of today, shall be for an initial term of 180 days, and may be
terminated by BPC or the Company upon 30 days written notice after 90 days from
the date hereof.

1)    SERVICES: BPC agrees to provide the Company with the following services:

      a)    Assist in the development and presentation of the company's business
            plan and strategy;

      b)    Assist in the development and presentation of any financial analysis
            or financial models, including comparable company analysis;

      c)    Assist in the management, coordination and negotiations of any fund
            raising activities including the development of a list of potential
            underwriting participants, development of selection criteria of
            syndicate members, coordination of potential syndicate members and
            positioning of the company within the financial markets. The goal of
            these activities is to create a more liquid, widely distributed and
            analyst covered stock.

      d)    Other services as may be agreed to from time to time.

2)    FEES: BPC shall be entitled to and the Company shall pay to BPC fees as
      follows: (i) an initial engagement fee of $50,000 or 20,000 shares of
      stock (at the Company's option) upon signature of this letter agreement;
      and (ii) a fee for each month of the term of this engagement of $10,000
      payable monthly in advance beginning March 1, 2004. The initial retainer
      and the first 4 months of the monthly retainer shall be credited against
      Transaction Fees, as defined below, payable by the Company to BPC.

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      CAPITAL INFUSION TRANSACTION

      If the Company enters into a Capital Infusion Transaction (as defined
      below) during the term of the engagement, or enters into a Capital
      Infusion Transaction during the 12 months following the termination of its
      engagement with BPC with any party which has been identified by BPC to the
      Company or concerning which BPC has performed meaningful advisory services
      at the Company's request, then the Company shall pay, or shall cause to be
      paid, to BPC a transaction fee in cash and/or warrants, according to terms
      defined below and calculated according to the following amounts and
      percentages (Table A).

TABLE A

    AMOUNT RAISED

    PUBLIC OFFERING ADVISORY SERVICES   Cash Portion:
                                        Completion of Public Stock Offering:
                                        2.5% of money raised in aggregate
                                        (including exercise of greenshoe) of
                                        which it is anticipated that the Company
                                        will pay 1.5% and the underwriters will
                                        pay 1% (pro-rata between cash and
                                        warrants).

    CAPITAL INFUSION (including         7% of money raised.
    common stock, preferred stock and
    convertible debt) in the event the  Warrant Portion:
    Company decides to raise capital    Warrants to buy stock at the price such
    outside of a public offering of     securities were sold to investors in an
    securities.                         amount equal to 4.0% of the value of the
                                        Capital Infusion Transaction

The Capital Infusion Transaction Fee shall be referred to as a "Transaction
Fee". Any Capital Infusion Transaction conducted by the Company shall be
referred to as a Transaction.

The Transaction Fee shall be payable at any closings of the Transaction, except
that to the extent the Consideration in respect thereof may be increased by
contingent payments, the portion of BPC's fees relating thereto shall be
calculated and paid as and when such contingent payments are made. All stock
and warrants paid to BPC as consideration for a Capital Infusion Transaction
will carry Standard Anti-Dilution Protection (as defined below).

In the event BPC successfully completes a Capital Infusion Transaction on behalf
of the Company during the engagement period, BPC shall have an exclusive right
of first refusal for a period of 12 months following the closing of such Capital
Infusion Transaction to provide similar services to those described herein. BPC
shall have 30 days, from receipt in writing provided by the Company of a bona
fide offer from a third party, to accept or decline providing the Company with
similar services on at least comparable terms.

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<PAGE>

3)        DEFINITIONS:

      "Standard Anti-Dilution Protection" means if at any time the Company shall
      (i) pay a dividend or make a distribution on its shares of capital stock
      or Securities ("Shares") in Shares (other than cash dividends or
      distributions out of surplus or earnings); (ii) subdivide, reclassify or
      recapitalize its outstanding Shares into a greater number of Shares; or
      (iii) combine, reclassify or recapitalize its outstanding Shares into a
      smaller number of Shares, the exercise price of any warrant, that is
      exercisable into Shares ("Warrant Shares"), in effect at the time of the
      record date of such subdivision, combination, reclassification or
      recapitalization shall be proportionately adjusted, and so that the
      warrant .holder shall be entitled to receive the aggregate number and kind
      of Shares which, if the warrant had been exercised in full immediately
      prior to such time, he would have owned upon such exercise and been
      entitled to receive upon such dividend, subdivision, combination,
      reclassification or recapitalization, whenever the exercise price payable
      upon exercise of such warrant is adjusted pursuant to this paragraph, the
      number of Warrant Shares shall simultaneously be adjusted by multiplying
      the number of Warrant Shares initially issuable upon exercise of each
      warrant by the exercise price in effect on the date thereof and dividing
      the product so obtained by the exercise price, as adjusted. Such
      adjustment shall be made successively whenever any event such as described
      in this paragraph shall occur. The form of warrant need not be changed
      because of any adjustments in the exercise price or the number or kind of
      the Warrant Shares, however accurate adjustments shall be kept in the
      official records of the Company.

      "Capital Infusion Transaction" means any Transaction (or series of
      transactions) which involves (a) a third party identified by BPC to the
      Company, or concerning which BPC has performed meaningful advisory
      services hereunder, and (b) which, directly or indirectly, results in (i)
      the purchase or sale of newly issued debt or equity securities of the
      Company, a subsidiary or a related affiliate or (ii) a firm commitment,
      that resulted from a request by the Company for BPC to pursue such a
      commitment, from BPC, its affiliates, or a third party to purchase or sell
      newly issued debt or equity securities of the Company, a subsidiary or a
      related affiliate, including, but not limited to, committed but undrawn
      credit facilities.

      "Warrants" paid as a fee in a Transaction are subject to expire on the
      tenth anniversary of the closing of the Capital Infusion Transaction and
      have Standard Anti-Dilution Protection, registration rights that are
      exercisable only in the event the Company has publicly traded shares and
      is qualified pursuant to SEC guidelines to file an S-3 registration
      statement, piggy-back registration rights, in the event the Company has
      publicly traded shares, and cashless exercise provisions and entitle BPC
      to purchase the Company's securities identical to the type and price of
      the securities sold by the Company at the time of the Capital Infusion
      Transaction.

4)       EXPENSES: In addition to the fees described above and whether or not a
      Transaction occurs, the Company shall reimburse BPC for its reasonable
      out-of-pocket expenses incurred in connection with BPC's services
      hereunder or the subject matter hereof, including, without

                                       3
<PAGE>

      limitation, legal (not including legal fees incurred by BPC in connection
      with the negotiation and preparation of this Agreement), accounting,
      computer and information databases, due diligence, background
      investigations, "Blue Sky" filings, marketing, "road show", travel and
      entertainment, printing and mailing, any escrow fees, and internal
      administrative expenses. Reimbursement by the Company of BPC's documented
      out-of-pocket expenses associated with providing its services hereunder
      will occur on a regular monthly basis. In the event that BPC's monthly
      out-of-pocket expenses exceed $2,500 in any month following the execution
      of this Agreement, BPC will be required to get approval in advance from
      the Company for any additional reimbursable expenses. The Company agrees
      to reimburse BPC within 15 days of receipt of reimbursable expense
      invoices. BPC recognizes that the Company has limited resources to fund
      expenses beyond these levels and agrees to work with the Company to
      minimize such expenses.

5)        INDEMNIFICATION: The Company agrees to indemnify BPC against all
      liabilities under the Securities Act or otherwise, as provided for in
      Schedule A attached hereto, which Schedule is an integral part of this
      agreement and is incorporated herein by reference.

6)        CONFLICTS; INDEPENDENT CONTRACTOR: The Company acknowledges that BPC
      and its affiliates may have and may continue to have investment banking
      and other relationships with parties other than the Company, pursuant to
      which BPC may acquire information of interest to the Company. BPC shall
      have no obligation to disclose such information to the Company or to use
      such information in connection with any contemplated Transaction.

      The relationship between BPC and the Company shall be that of advisor and
      client. BPC is an independent contractor and this agreement shall not be
      deemed in any way to establish a joint venture between BPC and the Company
      or as creating a partnership or similar relationship. BPC will provide its
      financial advice, written or oral, exclusively for the information of the
      Company's Board of Directors and senior management, who will make all
      decisions regarding whether to engage in any Transaction.

7)        ENTIRE AGREEMENT; AMENDMENTS; SURVIVAL: This agreement constitutes
      the entire agreement of the parties with respect to BPC's engagement and
      supersedes all prior negotiations and understandings of the parties hereto
      with respect to the subject matter hereof. This agreement may not be
      amended or modified except in writing signed by each party hereto. The
      provisions of Sections 2, 3,4, 5, 6, 7, 8, 9, 10, 11, 12 and 13 shall
      survive any termination of BPC's engagement hereunder. This agreement
      shall be binding upon, and inure solely to the benefit of, BPC and the
      Company, and all of their respective heirs, executors, administrators, and
      successors. BPC may engage its own sub-placement agents, independent
      contractors and/or consultants to assist BPC in conducting the
      Transaction. BPC shall have the right to place advertisements or other
      public announcements in financial and other newspapers and journals at its
      own expense describing its services to the Company hereunder. Any such
      advertisement of public announcement shall be subject to the approval of
      the Company, which approval shall not be unreasonably withheld; provided,
      however, that following the closing of a Transaction, BPC shall be
      entitled to describe its services to the Company in its own newsletter or
      in other public relations and promotional materials, without the approval
      of the Company.

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      8) REPRESENTATIONS AND WARRANTIES; ACCURACY OF INFORMATION; INTERESTS OF
      OTHERS: The Company will furnish to BPC any information concerning the
      Company, including its subsidiaries and affiliates, that BPC reasonably
      deems appropriate, and will provide BPC access to its officers, directors,
      accountants, counsel and other advisors. All such information concerning
      the Company is and will be true and accurate in all material respects, and
      does not and will not as of its date, and will not as supplemented or
      amended as of the date of the closing of any Transaction, contain any
      untrue statement of a material fact or omit to state a material fact
      necessary in order to make the statements therein not misleading in light
      of the circumstances under which such statements are or were made. The
      Company acknowledges and agrees that BPC will be using and relying upon
      such information supplied by the Company and other publicly available
      information concerning the Company, without any independent investigation
      or verification thereof or any independent appraisal by BPC of the Company
      or its business or assets. The Company further represents and warrants
      that no broker, representative or other person has an interest in
      compensation due BPC hereunder.

      9) CONFIDENTIALITY: Except as otherwise required by law, the terms of this
      Agreement shall not be disclosed to any third party, with the exception of
      potential investors in the Transaction as part of their due diligence
      efforts, without the prior written consent of both parties to this
      Agreement. BPC shall keep confidential and not disclose any non-public
      information provided to it by or on behalf of the Company or by any
      third-party, in relation to any of the services provided or to be provided
      by it to the Company, except that it may disclose any such information to
      its advisors (which persons shall be bound by similar confidentiality
      obligations and for which BPC shall accept full responsibility in
      compliance with this Section 9) or as required by law or with the prior
      consent of the Company. The restrictions in the preceding sentence shall
      not apply to information that becomes publicly available through no fault
      of BPC or information that BPC may be required by law to disclose.

      10) ADVERTISING: BPC shall have the right to place advertisements or other
      public announcements in financial and other newspapers and journals at its
      own expense describing its services to the Company hereunder. Any such
      advertisement of public announcement shall be subject to the approval of
      the Company, which approval shall not be unreasonably withheld; provided,
      however, that following the closing of a Transaction, BPC shall be
      entitled to describe its services to the Company in its own newsletter or
      in other public relations and promotional materials, without the approval
      of the Company.

      11) USA PATRIOT ACT NOTICE: The Company acknowledges that in order for BPC
      to comply with the requirements under Title III of the Uniting and
      Strengthening America by Providing Appropriate Tools Required to Intercept
      and Obstruct Terrorism Act of 2001 ("USA Patriot Act") (Public Law
      107-56), the Company must provide BPC with certain information or
      supporting documentation (collectively "Documentation") at the time of
      execution of this agreement. BPC is required by the USA Patriot Act to
      verify and record any Documentation provided by the Company to validate
      the Company's identity. Documentation that may be requested from the
      Company may include, but is not limited to, a Federal Employer

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<PAGE>

      Identification Number (FEIN), a Certificate of Good Standing to validate
      the Company's corporate existence, a Certificate of Incumbency to
      authenticate the management of the Company, and other government issued
      certified documents to validate the Company's authorization to conduct
      business.

      12) HEADINGS: Headings are provided solely for convenience and are not
      intended to be a part of this agreement.

      13) GOVERNING LAW: This Agreement shall be governed by, and construed in
      accordance with, the law of the State of New York without giving effect to
      principles governing conflicts of law. If any provision of this agreement
      or the application thereof to any person or circumstance shall be
      determined to be invalid or unenforceable, the remaining provisions of the
      agreement or the application of such provisions to persons or
      circumstances other than those to which it is held invalid or
      unenforceable shall not be affected thereby and shall be valid and
      enforceable to the fullest extent permitted by law.

      If the foregoing is in accordance with your understanding, kindly sign
      where indicated below and return an executed copy to us.

      BRYANT PARK CAPITAL, INC.

         /s/ Sam Schwartz
         ----------------------------
      By: Sam Schwartz

      Title: President

      Agreed & Accepted:

      XENONICS, INC.

      By:/s/ Alan Magerman
         -------------------------------
         Name: Alan Magerman
         Title: Chairman /CEO

                                       6
<PAGE>

                                   SCHEDULE A
                        INDEMNIFICATION AND CONTRIBUTION

      This Schedule A is a part of and ,is incorporated into that certain letter
agreement (together with this Schedule A, the "Agreement"), dated 3-1-04 by and
between the Company and BPC, Terms not otherwise defined herein have the meaning
ascribed to them in the main body of the Agreement.

      1.    By the Company. The Company agrees to indemnify and hold harmless
            BPC and its Affiliates, and the respective directors, officers,
            agents, consultants and employees of BPC and its Affiliates (BPC and
            each such entity of person, a "BPC Indemnified Person") from and
            against any losses, claims, damages, judgments, assessments, costs,
            legal fees and other liabilities (collectively "Liabilities"), and
            will reimburse each BPC Indemnified Person for all fees and expenses
            (including the reasonable fees and expenses of counsel)
            (collectively, "Expenses") as they are incurred in investigating,
            preparing, pursuing or defending any claim, action, proceeding or
            investigation, whether or not in connection with pending or
            threatened litigation, regulatory proceeding or arbitration and
            whether or not any BPC Indemnified Person is a party (collectively,
            "Actions"), arising out of or in connection with advice or services
            rendered or to be rendered by any BPC Indemnified Person pursuant to
            this Agreement, the Transactions contemplated hereby (including but
            not limited to any untrue statement of a material fact on the part
            of the Company in connection with the Transaction or any related
            Memorandum (the "Memorandum") or the omission to state in the
            Memorandum a material fact required to be stated therein or
            necessary to make the statements therein, in light of circumstances
            under which they were made, not misleading) or any BPC Indemnified
            Person's actions or inactions in connection with any such advice,
            actions, inactions, services or Transactions; provided that the
            Company will not be responsible and shall be reimbursed by BPC for
            any Liabilities or Expenses of any BPC Indemnified Person that are
            determined by a judgment of a court of competent jurisdiction which
            is no longer subject to appeal or further review to have resulted
            from such BPC Indemnified Person's gross negligence in connection
            with any of the advice, actions, inactions, services or transactions
            referred to above, or to the extent that any such Liabilities or
            Expenses arises out of or are based upon an untrue statement of a
            material fact or omission made in reliance upon and in conformity
            with written information furnished to the Company by BPC
            specifically for use in the preparation of the Memorandum. The
            Company also agrees to reimburse each BPC Indemnified Person tor all
            Expenses as they are incurred in connection with enforcing such BPC
            Indemnified Person's rights under this Agreement (including, without
            limitation, its rights under this Schedule A).

      2.    By BPC. BPC agrees to indemnify and hold harmless the Company and
            each officer, director, employee, agent or person, if any, who
            controls the Company within the meaning of the Securities Act and
            the Exchange Act (the Company and each such person, a "Company
            Indemnified Person"), against any and all Liabilities and

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<PAGE>

            Expenses, to which any Company Indemnified Person may become
            subject, under the Securities Act or otherwise, insofar as such
            Liabilities (or actions in respect thereof), arise out of or are
            based directly or indirectly upon BPC's gross negligence in
            performing its services, or BPC's intentional failure to comply with
            any applicable SEC regulations.

      3.    Procedure. Upon receipt by a BPC Indemnified Person or a Company
            Indemnified Person (either an "Indemnified Person") of actual notice
            of an Action against such Indemnified Person with respect to which
            indemnity may be sought under this Agreement, such Indemnified
            Person shall promptly notify the Company or BPC as the case may be
            (an "Indemnifying Party") in writing; provided that failure so to
            notify such Indemnifying Party shall not relieve such Indemnifying
            Party from any liability which such Indemnifying Party may have on
            account of this indemnity or otherwise, except to the extent such
            Indemnifying Party shall have been materially prejudiced by such
            failure. The Indemnifying Party shall, if requested by the
            Indemnified Person, assume the defense of any such Action including
            the retention of counsel reasonably satisfactory to the Indemnified
            Person. Any Indemnified Person shall have the right to employ
            separate counsel in any such Action and participate in the defense
            thereof, but the fees and expenses of such counsel shall be at the
            expense of such Indemnified Person, unless: (i) the Indemnifying
            Party has failed promptly to assume the defense and employ counsel
            or (ii) the named parties to any such Action (including any
            impleaded parties) include both such Indemnified Person and the
            Indemnifying Party, and such Indemnified Person Shall have been
            advised by counsel that there may be one or more legal defenses
            available to it which are different from or in addition to those
            available to the Indemnifying Party; provided that the Indemnifying
            Party shall not in such event be responsible hereunder for the fees
            and expenses of more than one firm of separate counsel in connection
            with any Action in the same jurisdiction, in addition to any local
            counsel The Indemnifying Party shall not be liable for any
            settlement of any Action effected without its written consent, which
            consent shall not be unreasonably withheld. In addition, an
            Indemnifying Party will not, without prior written consent of the
            applicable Indemnified Person, settle, compromise or consent to the
            entry of any judgment in or otherwise seek to terminate any pending
            or threatened Action in respect of which indemnification or
            contribution may be sought hereunder (whether or not any Indemnified
            Person is a party thereto) unless such settlement, compromise,
            consent or termination includes an unconditional release of each
            Indemnified Person from all Liabilities arising out of such Action.

      4.    Contribution. In the event that the foregoing indemnity is
            unavailable to a BPC Indemnified Person other than in accordance
            with this Agreement, the Company shall contribute to the Liabilities
            and Expenses paid or payable by such BPC Indemnified Person in such
            proportion as is appropriate to reflect (i) the relative benefits to
            the Company and, its shareholders, on the one hand, and to BPC, on
            the other hand, of the matters contemplated by this Agreement or
            (ii) if the allocation provided by the immediately preceding clause
            is not permitted by applicable law, not only such

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            relative benefits but also the relative fault of the Company, on the
            one hand, and BPC, on the other hand, in connection with the matters
            as to which such Liabilities or Expenses relate, as well as any
            other relevant equitable considerations. For purposes of this
            paragraph, the relative benefits to the Company and its
            shareholders, on the one hand, and to BPC, on the other hand, of the
            matters contemplated by this Agreement shall be deemed to be in the
            same proportion as (a) the total value paid or contemplated to be
            paid or received or contemplated to be received by the Company or
            the Company's shareholders, as the case may be, in the Transaction
            or Transactions that are within the scope of this Agreement, whether
            or not any such Transaction is consummated, bears to (b) the fees
            paid to BPC under this Agreement. The relative fault of the Company
            on the one hand, and the BPC on the other hand, will be determined
            with reference to, among other things, whether the untrue or alleged
            untrue statement of a material fact or the omission to state a
            material fact is relative to information supplied by the Company or
            BPC, and with reference to each of the Company's and BBC's relative
            intent, knowledge, access to information and opportunity to correct
            or prevent such statement or omission. The Company and BPC agree
            that it would not be just and equitable if contribution pursuant to
            this paragraph were determined by pro rata allocation or by any
            other method of allocation that does not take into account the
            equitable considerations referred to in this paragraph.

      5.    Other Liabilities. The Company also agrees that no BPC Indemnified
            Person shall have any liability (whether direct or indirect, in
            contract or tort or otherwise) to the Company for or in connection
            with advice or services rendered or to be rendered by any BPC
            Indemnified Person pursuant to this Agreement, the Transactions
            contemplated hereby or any such BPC Indemnified Person's actions or
            inactions in connection with any such advice, services or
            Transactions except for Liabilities (and related Expenses) of the
            Company that are determined by a judgment of a court of competent
            jurisdiction which is no longer subject to appeal or further review
            to be covered by this Agreement.

      6.    Effective. The reimbursement, indemnity and contribution obligations
            of the Company and BPC set forth herein shall apply to any
            modification of this Agreement and shall remain in full force and
            effect regardless of any termination of, or the completion of any
            Indemnified Person's services under or in connection with, this
            Agreement.

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<PAGE>



                           [BRYANT PARK CAPITAL LOGO]

      CONFIDENTIAL

      April 12, 2004

      Board of Directors
      c/o Alan Magerman
      Xenonics, Inc.
      2236 Rutherford Road
      Carlsbad, CA 92008

      Attn: Alan Magerman, CEO

      RE:   Amendment 1 (the "Amendment") to the agreement set forth in the
            letter agreement, dated March 1, 2004

      Dear Alan:

      Reference is made to the agreement (the "Agreement"), set forth in the
      letter agreement, dated March 1, 2004 (the "March 1st Letter"), by and
      between Bryant Park Capital, Inc. ("BPC") and Xenonics, Inc. (together
      with its subsidiaries and affiliate, the "Company"). BPC and the Company
      have mutually agreed to amend and modify the Agreement as set forth below.
      All terms used herein and not defined herein shall have the meanings
      ascribed to them in the March 1st Letter.

      PIPE TRANSACTION

      The parties agree to delete the CAPITAL INFUSION section of TABLE A of the
      March 1st Letter in its entirety and replace it with the following, which
      shall hereby become part of the Agreement;

          CAPITAL INFUSION              8.0% of money raised.
          (including common
          stock, preferred              Warrant Portion:
          stock and                     Warrants to buy stock at the price such
          convertible debt)             securities were sold to investors in an
          raised via a Private          amount equal to 8.0% of the value of the
          Investment in Public          Capital Infusion Transaction
          Equity ("PIPE")
          transaction

              489 FIFTH AVENUE - 27TH FLOOR - NEW YORK, NY - 10017
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<PAGE>

Xenonics, Inc.
April 12, 2004
Page 2 of 3

MERGER OR ACQUISITION TRANSACTION

The parties agree that if the Company enters into discussions regarding an M&A
Transaction (as defined below) during the term of the Agreement and BPC provides
advisory services to the Company at its request in connection with such M&A
Transaction or has introduced such other party to the M&A Transaction to the
Company, or enters into an M&A Transaction during the 12 months following the
termination of the Agreement but was initiated during the term of this
agreement, then the Company shall pay, or shall cause to be paid, to BPC upon
the consummation of such M&A Transaction, a transaction fee (the "M&A
Transaction Fee") payable in cash calculated according to the following amounts
and percentages (Table B).

                                    TABLE B

<TABLE>
<CAPTION>
                                                                  PERCENTAGE TO BE APPLIED
                                                               TO PORTION OF CONSIDERATION IN
CONSIDERATION (AS DEFINED BELOW) IN THE M&A TRANSACTION             THE M&A TRANSACTION
-------------------------------------------------------        ------------------------------
<S>                                                            <C>
          Aggregate Consideration                                          2.5%
</TABLE>

The M&A Transaction Fee and Capital Infusion Transaction Fee shall individually
be referred to as a "Transaction Fee" and together the "Transaction Fees." Any
M&A Transaction or Capital Infusion Transaction conducted by the Company shall
be individually referred to as a Transaction.

DEFINITIONS

"M&A Transaction" means one or more related Transactions (a) is not a Capital
Infusion Transaction (as defined in the March 1st Letter) and (b) which,
directly or indirectly results in (i) the acquisition by the Company of all or
any part of the existing capital stock of a third party or all or any part of
the assets of such third party (or any securities convertible into or
exchangeable for or other rights to acquire all or any part of such capital
stock or assets) or (ii) the acquisition by a third party of all or any part of
the existing capital stock of the Company or all or any part of the assets of
the Company (including any securities convertible into or exchangeable for or
other rights to acquire all or any part of such capital stock or assets),
including in each such case, without limitation, any sale or exchange of capital
stock or assets (including cash and other liquid assets), any merger or
consolidation (including any such transaction in which the third party is the
surviving entity) or any similar transaction or (iii) any partnership, joint or
collaborative venture, strategic alliance or similar transaction.

"Consideration" in a Transaction means, with respect to such Transaction, the
total amount paid or payable (whether in cash, securities, employment
contracts, to the extent the compensation and benefit under such employment
contracts are materially in excess of what is reasonable for the services to be
performed thereunder, "earn-out" agreements, seller's financing or other
property), directly or indirectly, upon the consummation of or otherwise in
connection with such Transaction, together with (i) all amounts paid or payable
in cancellation of stock options or other rights, (ii) the aggregate principal
amount of long-term indebtedness of the acquired company that, as a result of
such Transaction, becomes indebtedness of the acquiring company and (iii) the

<PAGE>

Xenonics, Inc.
April 12, 2004
Page 3 of 3

aggregate redemption price or liquidation preference of any preferred stock of
the acquired company that, as a result of such Transaction, is redeemed or
becomes preferred stock of the acquiring company, as the case may be. For
purposes of this definition, long-term indebtedness shall be determined both as
to classification and amount on a consolidated basis in accordance with
generally accepted accounting principles. In the event that the Consideration
received in a Transaction is paid or payable in whole or in part in the form of
securities or other property, the value of such securities or other property for
purposes of calculating the Consideration for such Transaction shall be (i) the
closing bid price, in the case of publicly traded securities and (ii) the fair
market value as the parties hereto shall mutually agree in the case of contracts
or unquoted securities, in each case calculated as of the business day
immediately preceding the consummation of the Transaction.

Except as amended by this Amendment, all of the terms, covenants and conditions
contained in the Agreement are hereby ratified and confirmed and shall remain in
full force and effect.

This Amendment may be executed in two or more counterparts, and by the different
parties hereto in separate counterparts, including by facsimile, each of which
when executed shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.

Sincerely,

BRYANT PARK CAPITAL, INC.

By:/s/ Joel Magerman                                            Date: 4/16
   --------------------
Name: Joel Magerman
Title: Chief Executive Officer

Accepted and Agreed:

XENONICS,INC.

By:/s/ Alan Magerman                                             Date: 4/16/04
   -------------------------
Name: Alan Magerman
Title: Chief Executive Officer

<PAGE>



                           [BRYANT PARK CAPITAL LOGO]

CONFIDENTIAL

May 18, 2004

Alan Magerman
Chairman and CEO
Xenonics Holdings, Inc.
2236  Rutherford Road
Carlsbad, CA 92008

Attn: Alan Magerman, CEO

RE: Second Amendment (the "Amendment") to the agreement set forth in the letter
agreement, dated March 1, 2004

Dear Alan:

      Reference is made to the agreement (the "Agreement") set forth in the
      letter agreement, dated March 1, 2004 (the "March 1st Letter"), by and
      between Bryant Park Capital, Inc. ("BPC") and Xenonics Holdings, Inc.
      (together with its subsidiaries and affiliates, the "Company"). BPC and
      the Company have mutually agreed to amend and modify the Agreement as set
      forth below. All terms used herein and not defined herein shall have the
      meanings ascribed to them in the March 1st Letter.

      STRATEGIC ALLIANCE

      If the Company enters into a Strategic Alliance Transaction (as defined
      below) during the term of the engagement, or enters into a Strategic
      Alliance Transaction during the 18 months following the termination of the
      engagement with BPC with any party which has been identified by BPC to the
      Company or concerning which BPC has performed advisory services at the
      Company's request, then the Company shall pay, or shall cause to be paid,
      to BPC a transaction fee in cash equal to 2.5% of the value of the
      Strategic Alliance Transaction (the "Strategic Alliance Transaction Fee")
      during the term of the Strategic Alliance.

                          489 FIFTH AVE., 27TH FLOOR
                            NEW YORK, NEW YORK 10017

                                Member NASD/SIPC

<PAGE>

Xenonics Holdings, Inc.
May 18, 2004
Page 2 of 3

      DEFINITIONS

      "Strategic Alliance Transaction" means any transaction (or series of
      transactions), including a joint venture, partnership, sales and marketing
      agreement or any similar transaction, whether or not including an
      investment, which involves (a) a third party identified by BPC to the
      Company, or concerning which BPC performed advisory services hereunder,
      and b) which, directly or indirectly constitutes a new business
      opportunity.

Except as amended by this Second Amendment, all of the terms, covenants and
conditions contained in the Agreement are hereby ratified and confirmed and
shall remain in full force and effect.

This Second Amendment may be executed in two or more counterparts, and by the
different parties hereto in separate counterparts, including by facsimile, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.

Sincerely,

BRYANT PARK CAPITAL, INC.

By: /s/ Joel Magerman                                         Date: 5/18
   ----------------------------
Name: Joel Magerman
Title: Chief Executive Officer

Accepted and Agreed:

XENONICS, INC.

By: /s/ Alan Magerman                                         Date: 5/18/04
   ----------------------
Name: Alan Magerman
Title: Chief Executive Officer